Medium2 marksMultiple Choice

Employment lawEmployment lawUnfair dismissal

This question is part of a case study — click to read the full scenario(Case 49)

Section B - Scenario 2

IronForge Ltd is a heavy manufacturing company. They engage Sarah as a welder. Sarah must wear an IronForge uniform, work set shifts from 8am to 4pm, and use IronForge's welding equipment. However, her contract explicitly states: 'Sarah is an independent contractor and is responsible for her own tax.'

Based on the multiple (economic reality) test, what is Sarah's likely employment status?

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ACCA · Question 50 · Employment law

Section B - Scenario 2

IronForge Ltd is a heavy manufacturing company. Mark, a machinist with 3 years of service, is caught stealing scrap metal from the factory floor. The company immediately dismisses him without notice and without holding a disciplinary hearing, citing 'gross misconduct'.

Is Mark's dismissal likely to be considered fair by an Employment Tribunal?

Answer options:

Yes, because theft is gross misconduct which justifies immediate dismissal.

Yes, because he has less than 5 years of service.

No, it is likely unfair because IronForge failed to follow a fair disciplinary procedure.

No, because scrap metal has no value to the company.

How to approach this question

Distinguish between the substantive reason for dismissal (conduct) and the procedural fairness required by law.

Full Answer

C.No, it is likely unfair because IronForge failed to follow a fair disciplinary procedure.✓ Correct

For a dismissal to be fair, the employer must have a fair reason (conduct/theft is a fair reason) AND act reasonably in treating it as a sufficient reason. Acting reasonably requires following a fair procedure (investigation, hearing, right to appeal) as per the ACAS Code of Practice. Dismissing someone on the spot without a hearing is procedurally unfair, making the dismissal unfair overall (Polkey v AE Dayton Services).

Common mistakes

Assuming gross misconduct means the employer can skip disciplinary procedures entirely.

Question 49 All questions Question 51

Practice the full ACCA LW — Corporate and Business Law Practice Exam 6

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